Karl Slym, Managing Director of Tata Motors , says he met a number of customers — truck owners with large fleets of 300-450 vehicles — during a recent visit to Hyderabad.

All are prepared to buy more trucks, but plan to wait a few months for positive signs of economic revival, he told Business Line .

This is the problem with the auto industry’s medium and heavy commercial vehicle segment (M&HCV). There are no clear signs of a revival in the economy, says Ravindra Pisharody, Executive Director and Head, Commercial Vehicle Business Unit, Tata Motors.

Revival still distant

Unlike in 2008, when too truck sales fell but recovered quickly, this time the fall in M&HCV sales is because of internal factors. The economy itself is forecast to grow around five per cent. The slowdown last time was caused by global factors.

At a press conference on the occasion of the roll-out of the two millionth commercial vehicle from the Jamshedpur plant, Slym and Pisharody reiterated that a revival in the economy was still some months away, as far as the truck business was concerned. Asked if the green shoots the Government was talking about were visible, Pisharody said: “Unfortunately not.”

“If you look at manufacturing and mining, there is some talk of legal mining coming back, we are still not seeing signs of that,” he said at an interaction with a few journalists, who were in Jamshedpur at the invitation of Tata Motors.

Slym told the press conference that the Government needed to recognise the huge drop in sales of trucks and not just at the flat or nominal growth rate projected for the passenger vehicles segment, and get its act together. The medium and heavy commercial vehicles segment was the real growth driver for the economy. This, he said, had fallen 38 per cent, while passenger vehicle projections were still all right at 0-1 per cent growth.

(According to the Society of Indian Automobile Manufacturers figures, M&HCV sales for the entire industry fell 21 per cent to 217,174 in the April 2012-January 2013 period, while overall commercial vehicle sales were down 0.37 per cent to 639,086 over the same period last year. For Tata Motors, M&HCV sales fell 29 per cent to 117,682 units during this period, while overall CV sales were up three per cent at 432,597 units.)

Infrastructure spending and the mining sector are two areas the Government needs to look at, if economic growth is to revive, Slym said.

Pisharody said: “The last downturn we can look back at, in hindsight, with great joy, because it lasted only four months.” The difference was that it was external trigger driven — global liquidity, cash getting out of the system. This time it was much more deep-rooted. It was more comparable with the 1999-2000 period, when it took a couple of years for the downturn to really bottom out and then you had the 2002-06 period of robust growth again.

The factors, according to Pisharody, are more to do with the state of the economy, the reforms agenda not really picking up and overall sentiment being low. “In our business the problem is people postpone (purchase) en masse ,” Pisharody said.

Common rail engines for Ace, Magic

However, sales of small and light commercial vehicles, which Pisharody referred to as the non-cyclical part of the CV business, were still robust. This was because the segment is characterised by individual purchases and not large fleets. The small and light commercial vehicles segment grew 15 per cent for the industry so far this financial year, while for Tata Motors it was up 24 per cent.

According to Pisharody, Tata Motors will introduce common rail diesel engines in both the Ace and Magic models.

> ramakrishnan.n@thehindu.co.in

Related Topics
comment COMMENT NOW